Brief Summary
Kim from The Pivot Trader delivers a morning outlook, noting that European markets are observing a bank holiday, which may affect trading volumes. The report reviews the impact of Friday's non-farm payroll data, upcoming economic data releases, and technical analysis of various currency pairs, commodities, and indices. Kim shares potential trading setups, expresses caution due to market conditions, and highlights the varying strengths and weaknesses across different assets.
- The US dollar yen is being considered for shorts if it breaks below the weekly pivot.
- Gold is showing signs of weakness, with potential opportunities if it reacts at the weekly pivot.
- Equity markets, particularly the FTSE, are looking bullish, while the DAX appears weaker.
Introduction and Economic Calendar
Kim starts the morning outlook by acknowledging that it's a bank holiday in much of Europe, which could lead to reduced trading volumes, especially in the morning. The economic calendar for the week includes UK jobs data and inflation figures, as well as US inflation data. Kim notes that Mondays following non-farm payroll releases tend to be less volatile.
Euro/Dollar Analysis
The Euro/Dollar is showing signs of recovery after Friday's price drop, finding support at the 4-hourly 50 level and moving above its daily pivot. Kim is watching to see if it can break above R1 or if it will decline again. The currency pair is currently sitting on a quarterly pivot, which has previously acted as resistance. Kim does not currently have a trade setup for this pair.
Pound/Dollar Analysis
The Pound/Dollar is showing strength, moving towards its daily R1 pivot. Kim notes the higher lows and suggests that if a reversal occurs, the Euro would be a better short opportunity than the Pound, as the Pound looks stronger on the daily chart.
Dollar/Yen Analysis
The Dollar/Yen is reacting to its monthly pivot, and Kim is considering short positions if the dollar weakness continues. He wants to see the price break below the weekly pivot before considering a short trade, as it could find support and bounce from its current level.
Canadian Dollar Analysis
The Canadian Dollar had positive news from Canadian non-farm payrolls. Kim is looking at lower time frames and suggests that breaking past the daily hourly 50 could lead to a move back to the downside.
Aussie and New Zealand Dollar Analysis
Kim is avoiding trading the Aussie Dollar due to its unappealing chart. The New Zealand Dollar is showing a similar pattern to the Aussie Dollar but with a slightly better trend. Kim notes that both currencies have similar retracements and bounces to the Pound and Euro.
Swiss Franc Analysis
Kim is unsure about the trend lines on the Swiss Franc chart. The original trend is to the downside, but there was a sharp movement. The risk with the Swiss Franc is potential intervention from the Swiss National Bank, especially at its absolute lows.
Euro/Yen Analysis
The Euro/Yen pulled back after Kim anticipated a breakout last week. It's reacting to double tops and facing resistance from previous highs. With the Yen strengthening, it could return to its previous range.
Euro/Pound and Euro/Aussie Analysis
The Euro/Pound is not showing much movement, but Kim prefers a downside move due to his outlook on Europe and desire for a strong Pound. The Euro/Aussie is sliding back, with lower highs coming through. It initially broke out of an ascending channel but then returned within it. Kim is generally avoiding Aussie-related pairs.
Gold Analysis
Gold is finding support at a quarterly pivot and heading towards its weekly pivot, but it looks weak overall. Kim notes a bare flag pattern and wants to see how it reacts at the pivot. If it continues through the pivot, he is not interested.
Oil Analysis
Oil has been making a slight recovery but remains unappealing to Kim. He prefers to avoid it in its current state.
S&P 500 Analysis
Kim emphasises the importance of patience in trading, especially with numerous risk factors present in the market. The S&P 500 reacted positively to Friday's numbers and is approaching all-time highs. There's a pennant pattern forming with lower highs and higher lows, and the market looks bullish.
FTSE and DAX Analysis
The FTSE has started strongly and is close to all-time highs, targeting R1. The DAX, however, is flatlining and consolidating away from the highs, indicating weakness. Despite this, Kim hasn't written it off, considering the bullish sentiment in other equity markets.
Conclusion
Kim concludes the morning outlook, wishing viewers a great day and mentioning he will be back tomorrow.
